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The United States and Japan are reportedly close to finalizing an agreement that will further restrict the export of advanced chip technology to China.
Tokyo faces potential backlash from Beijing as Washington pushes for tighter restrictions on semiconductor technology exports to China, marking a new dimension in the ongoing semiconductor tensions between the nations.
According to sources cited by the Financial Times(FT), this deal is part of Washington’s broader effort to close the gaps in existing export control regulations.
Negotiations between the two countries have been intense, with U.S. officials from both the Department of Commerce and the National Security Council leading the talks.
This latest development follows a recent report indicating that Nvidia’s AI chips are being sold at lower prices in China than in the United States, despite export controls being in place.
Although talks have progressed, the FT points out that Japan has expressed growing frustration with the pressure coming from the U.S., particularly over President Biden’s move to block Nippon Steel’s $15 billion acquisition of U.S. Steel.
Japan Fears Chinese Retaliation
While the U.S. has been pushing Japan and the Netherlands to adopt further export restrictions that complement existing American policies, Tokyo remains cautious due to concerns over potential retaliation from Beijing.
China has already warned Japan of severe economic consequences if further restrictions are imposed. Among the most pressing threats is China’s potential to limit Japan’s access to critical minerals like gallium and graphite, which are essential for the production of automotive components.
The Biden administration’s push to finalize the deal reflects growing urgency as it aims to unveil the export controls before the upcoming U.S. presidential election. Both the U.S. and Japan are keen to limit China’s access to cutting-edge technology, but the situation remains fragile, with Tokyo weighing the risks of potential economic fallout from Be
